InfraPITCH: LAPSSET Crude Oil Pipeline Project

Executive Summary

Case Study 

LAPSSET Crude Oil Pipeline Project

Project Overview

The second pitch, presented by Itunu Adewole, examined a cornerstone of the broader Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor: the Crude Oil Pipeline. This transformative project aims to connect oil production from South Sudan and Kenya’s Lokichar Basin to a new deep-water port at Lamu, providing a secure and commercially viable export route for the region.

With estimated production of 150,000-180,000 barrels per day from South Sudan and 60,000-80,000 from Kenya, the project promises to fundamentally alter the economic landscape of Eastern Africa and catalyze regional integration .

The core challenge for this project lies in its risk profile. The panel’s feedback centered on the significant risks embedded in the project’s structure, particularly regarding production forecasts. Jurors raised concerns about “volumetric risk,” noting that production from frontier geological markets may not meet projections, rendering a take-or-pay offtake agreement less protective if reduced flow triggers a force majeure declaration.

They also flagged the build-up period-the lag before production ramps up to design capacity-as a critical cash flow risk. The team’s strategy of using MIGA political risk insurance to mitigate cross-border risks was challenged, with jurors suggesting that a Partial Risk Guarantee might be more suitable given the limited capacity of either sovereign state to independently cover the project’s exposure . This project highlights the critical need for robust risk mitigation and realistic cash flow modelling in early-stage energy infrastructure.

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